Client Conflict? Solve with the Three R’s

It’s great when you love every one of your clients. Chances are, though, there’s one (and sometimes more than one) client that gives you headaches. That client who makes extra demands, is unreasonably dissatisfied with your work or, worse, doesn’t pay as promised. You may even have a regular client who suddenly changes the rules on you. When you have a problem with a client (which happens to us all), you need to be prepared with effective conflict resolution techniques. The techniques will help you save the client relationship if it can be saved, or end it while minimizing bad feelings and the harm to your business and the client.

The three important steps to deal with problem situations are Review, Respond, and Resolve.

Review – When a client first contacts you with an issue or problem with which you are not personally familiar, your initial response should be something along the lines of “I’m sorry you are not 100% satisfied with our services, I’ll look into this immediately”. Your first instinctive response may be emotional but it’s important to have a clear head, keeping in mind it’s only a business transaction and not personal. Before you commit to take any particular action, stop and review the situation.

Carefully gather and review the facts and opinions of your own employees. It’s important to understand where your company may have gone wrong, what you likely did right and determine what the parties’ reasonable expectations were going into the situation. Most customer service issues are caused by a disconnect between expectations and reality. Therefore, the biggest question to ask is “Did we deliver what we promised to deliver?” Whether the answer is “yes”, “no” or somewhere in between you must then ask the follow-up question of yourself and your business – “Why?”.

How much time and effort you spend on your review will depend on the situation. If the client is calling to complain about a $25 lamp that was broken during a housecleaning – you may want to quickly speak with members of your cleaning crew before calling the client. If a client accuses your flooring crew of installing the wrong color hardwood, which could be a $4,000 mistake – you may need to review the project specs and paperwork, talk to the vendor and interview your project manager and flooring crew. Once you have the information you need, or as much of it as you can reasonably gather without hiring a private detective, you are ready for the next step, which is to get the client’s side of the story. You will likely have an idea of what your stance will be, but it’s still important to hear their side of the story before attempting to resolve the situation.

Respond – When you are ready, have a conversation with the client, face to face if possible, or you can request them to state their position in writing if the severity of the situation merits it.

Ask the client to state their view of the facts. Ask for documentation where appropriate. Again, the client may be emotional, perhaps understandably. While you should acknowledge the client’s frustration, as much as possible keep focused on the facts, It’s the client’s right to be emotional and you can’t tell someone how to feel. However, you are the business owner and you can choose to control your own emotions. A highly emotional response rarely leads to a good outcome no matter the underlying facts.

Most importantly – listen. Does the client want work done that’s outside the contract? Did the client have a different understanding of what the final results would or should be? Did you properly set expectations during the sales process? Did you meet their and your own expectations of quality? Were there communication problems that contributed to the situation? Ask follow-up questions to fully understand the client’s position. Hear them out and avoid the temptation to pick holes in their story along the way.

Based on the client’s story you may have to go back to the first step of your process and conduct additional review. You may also want to go back to the office and sift through the facts to see where you and the client agree and where your facts differ from theirs.

Before moving on to the final step of the conflict resolution process, which will be to attempt to resolve the situation, prepare a response to the client based on the facts you’ve uncovered. The level of formality of your response will depend on the stakes at hand. It could be as informal as a phone call, or as formal as a position letter from your attorney. Restate your client’s position based as you understand it. Then state your company’s position based on the results of your investigation. Point out where you and the client agree and where you differ on what the facts and. If appropriate ask the client to comment on whether they agree with your restatement of the facts. Whether the response is formal or informal it should be from your company, not you personally unless you are personally involved. In most keeping it from your company removes much of the emotion from the situation.

Resolve – This is the toughest step. Once you and your client have laid out your position, how do you come to a resolution. First – Three Quick Ground Rules on conflict resolution:

First Rule – despite what you’ve heard, the customer is NOT always right. You are not LL Bean with their “100% no questions asked” guarantee.

Second Rule – Being right is not always the most important factor in resolving a situation. LL Bean doesn’t offer 100% guaranteed replacement of their products forever because the client is always right or their products fail – they offer the guarantee because this unique approach to a guarantee is worth much more in sales in a crowded retail market than what LL Bean loses on the rare occasions when a customer takes advantage of them to return 10-year-old hiking boots for a free replacement pair.

Third Rule – Principal can be expensive. You must weigh the pros and cons of holding your ground versus compromise versus giving in. Is a fight with a client, even if you are 100% sure you are right, worth the cost to you and your business in lost time, expense, potential liability, reputation and future sales? You could be 100% correct and still end up in a lawsuit that costs you many thousands of dollars to defend or getting bombed on social media by your angry client. Or you could give in to a client to appease them and open your company up to a “feeding frenzy” of other customers in similar circumstances. You have to carefully choose your battles and how you fight them in this era where your emails to your client can be instantly posted to social media.

Fourth Rule – Compromise is a good thing. You know it’s a good compromise when neither party walks away totally happy with the result but both parties are happy the situation is resolved.

If a compromise is available, find something you both can agree on. Have an outline ready of what steps you will take to amend the situation, and walk the client through each step. Communicate any options for a potential solution to the client, and if possible let the client give input on which solution will remedy the issue. Have (and show) confidence that you can work together to fix the problem.

An important part of the resolution process is to write it down any and every detail relating to a client conflict. Reaffirm any face-to-face interactions or phone calls with emails detailing what you spoke about. The documentation can help communicate what resolution will work for the client. Having it written down can also serve as proof should the situation escalate into a “legal” issue.

When you and the client have found a solution that both of you can agree on, create a plan and timeline that works for both of you. Carry out the plan to rectify the problem as soon as possible. If you made a mistake, apologize. Remember to thank the customer for bringing it to your attention and for their time working on a solution. This is an opportunity to make your business better and it can solidify your relationship with the client. Quickly addressing issues can help avoid bad reviews online or clients just leaving without letting you know why. Any time a client takes the time to point out an issue, it actually can help strengthen your customer service.

If you are unable to reach a resolution with your client through a collaborative process, consider turning to a third party for help. Mediation, arbitration, collaborative law, and litigation are all ways you can settle a dispute, particularly when money is involved. If the issue comes to the point where you can’t resolve it with the client on your own, check with your lawyer on the best course of action.

It seems counterintuitive to “fire” a client. There are two main reasons why you should. One, if you are unable to reach a reasonable resolution to an issue that the client has you may simply be a bad fit for each other. If the client cannot or will not compromise or accept action that rectifies the problem, let them know you cannot serve them any longer. The second reason is if you are spending more time, energy, or resources than you can ever hope to be compensated for by the client. Time is money as they say, and if the client is costing more money than you will earn from them, letting the client go is best for your business. It’s not easy to break up with clients, but you will both be happier in the long run.

Whether you just started your business or your company has been around for 20 years, managing a problem client can present difficulties. Before small headaches become large conflicts, go through your Review, Respond and Resolve process. And if you want a second set of eyes on a client dispute, reach out to your trusted advisors for help. We are honored that our clients rely on us to help navigate these very challenging issues and we would be happy to speak with you.